Functional impairment has been well established as an adverse consequence of late-life depression. The complex relationship between depression and functional status in older adults includes its bidirectional nature. Mechanistically, these conditions may be causes or consequences of each other, part of the same syndrome or parallel processes from a shared risk factor. Recent research has identified increased white matter hyperintensities (WMH), a biomarker signaling vascular changes in the brain, as a predictor of functional decline outside of depression. These WMH are also commonly seen in late-life depression. Although in cross-sectional studies WMH are associated with functional impairment in depressed older patients, it is not known whether increases in WMH volume predicts functional decline in older adults with major depression. More importantly, it is not known how the presence or absence of depression may impact or contribute to the relationship between WMH volume and functional decline in late life. Concurrent changes in cognition may also affect these relationships among WMH, depression, and functional status. The proposed work offers the unique opportunity to clarify within a sample of 518 older adults initially diagnosed with major depression and a comparison group of 195 initially never depressed older adults followed over time the extent to which white matter hyperintensities predict trajectories of depression and physical and cognitive functional decline. Given the high proportion of older adults with functional limitations and depression identified as a leading cause of disability, information to disentangle the complexity between depression and functional decline through a shared biomarker has much clinical relevance. For example, it may support better management of cerebrovascular risk factors among older depressives in order to prevent functional decline. Using data from the NeuroCognitive Outcomes of Depression in the Elderly (NCODE) study, we propose a secondary data analysis plan to address two potential pathways underlying these complex relationships: 1) depression and physical/cognitive functional decline as parallel processes predicted by increased WMH volume, and 2) depression as a mediator and/or moderator in the relationship between white matter pathology and functional variation and decline among older adults, suggesting a unique contribution of depression. The NCODE, now in its sixteenth year, is a naturalistic treatment study of adults age 60 or older diagnosed with major depression and a comparison group of never depressed older adults followed over time. WMH data were collected at two-year intervals using an approved MRI protocol. The proposed analysis plan includes the use of mixed models to examine the contribution of depression to the cross-sectional and longitudinal associations between WMH and functional status. As well as adjusting for correlated measures over time, mixed models allow changes in other variables such as medical comorbidity to be included in the longitudinal models.